If he were Rupert….

Mark Pincus tells Rupert Murdoch what to do… and gives good advice, telling him to buy Craig’s List.

Only problem is, he sees newspapers as an asset and Rupert owns only one in America, last I checked. And, besides, I’m not sure how much of an asset newspapers really are in the world Mark pictures. He’s still thinking about centralizing content and advertising when they will inevitably become decentralized. Still, he’s giving good advice to any newspaper company in the country to reinvent itself. He’s suggesting ways to grow in the right places (content, community) and shrink in the right places (cost).

I don’t agree with his prescription for classifieds, because I think classifieds will become distributed — they will live wherever they live on the internet and they will be found via microformats, tags, and search. The market will become more efficient and the middlemen will choke. So middlemen will be the last people to change the business model. Says Mark:

i would work on using my newspapers to drive my online classifieds business. offer free liners (that’s the small text classifieds that use weird acronyms and are unreadable anyway) as an incentive to post online – ie. you get free newspaper placement for giving us the gift of your free online listing. maybe you can charge $5 but doesnt really matter. then i’d go for all color print classifieds for my cars and housing as that’s way better for consumers than bothering to go online – ie. a place the paper still wins.

They should only wish.

But then Mark moves onto content:

i would also transform my papers to more of an about.com model where most of my editorial/writing staff are part timers and a lot of my content is coming from other sources – ie. drastically lower my cost of content creation while increasing community involvement.

Right on.

And then advertising:

i would turn my ad people into reps for local media, both offline and online. i’d use myspace as an anchor tenant to create critical mass in local online page views to sell locally – ie. i go to philly.com and anyone else with philadelphia specific traffic and sell it as a package.

Right. The hyperlocal distributed ad network.


oh, how about using my fox tv network as an inducement to get people to start creating video blog content for me for free?

The key is that you won’t make money by standing in the way, creating friction, making markets inefficient, the way newspapers and other media have. In the future, you’ll make money — less money, but the only money to be made — by enabling people to do what they want to do without the friction, in a very targeted and efficient way. And you’ll be involved in those transactions only if you truly help, if you’re needed — not if you interefere, not if you’re just a toy. That’s why Craig’s List is so valuable: Craig gets out of the way.

Mark reveals some of the research he did for Tribe, when he found the fleeting value of Friendster, which people saw as a toy while they saw Craig’s List as a utility.

myspace does risk the same extinction as friendster if they fail to convert the hours of play to minutes of utility….

so i will predict right here that if rupert and his team manage to create craigslist out of myspace they will have a massively valuable property. and i say good luck to rupert. he’s clearly having more fun than me!

In the end, what Mark’s really saying is that Rupert’s value is the power of promotion. OK. But note well that Fox TV took less time to build than, say, CBS… but Myspace took a helluva lot less time to build than Fox. Promotion isn’t the real value. Relationships are. Trust is.

  • One point of distinction, Jeff.

    Middlemen won’t choke. Ever. There’ll just be more of them. Just like you are a middleman of information.

    Publish. Aggregate. Syndicate.

    Syndication of microformatted data will make us all middlemen.

  • Fair enough, Peter, but isn’t the difference that the old middlemen won by controlling scarcity (information or distribution) while the new middlemen win by sharing.

  • Amen, Brother. Amen.

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  • I was part of a team from Nextera (a now defunct strategy consulting firm whose largest investor was Rupert pal Mike Milken’s Knowledge Universe) as a consultant to News Corp during the internet bubble.

    I was 19 when I was part of this engagement, and I was brought in for my supposed internet-savvy. I was supposed to be adding content and functionality suggestions for a strategy to create an internet property for a speciality cable network that they had recently created.

    Instead, I found myself butting heads with my consulting colleagues since the online health space already had its fill of portals.

    My advice? Leverage your real asset (your television network) for cash and warrants with an internet player who needed to support their valuation. Wait, I’m not taking credit for News Corp’s deal with WebMD which ended up (at the time) being valued at around $1 billion (incl. warrants available to be earned).. I’m not sure I was really listened to by most of the people on my consulting team nor most anyone at News Corp except for the uber-smart Anthea Disney.

    Anyway, to my knowledge that deal was still the only stand-out internet success (in Rupe currency at least) at News Corp: Leverage your existing assets for sale/license. I think Rupe et all will continue to look at internet acquisitions/investments primarily from a cross-licensing/promotion vehicle. Their goal is purely to not to stay ahead of the pack but to identify the assets that can be cost-effectively purchased or dealt with that lever/promote their content.

    Regardless of their positioning, News Corp’s management team is “content centric.” The whole notion of decentralized media is really not something they’ll be able to easily wrap their heads around.

    By the way, notice that MySpace has now introduced a Classifieds app.

  • FRED and loan offer


  • If I was Rupert, I’d go shopping. I’d buy pretty dresses and fast cars and faster men. But hey, that’s not what you meant.

    There is still value in mastheads. Rupert’s or others. We’re all StarFarkers (can I say that? Please?) and love to converse with celebrities, even *shudders* journalists. It’s just a shame that newspapers that have blogs, and journo’s that blog, don’t understand the DIALOGUE aspect of Web 2.0. It’s really bloody rare to have the journalists respond in their own blog; just one post a day (ok, maybe two) would be enough. Sheesh. Rupert has olde guarde to get rid of at NewsCorp (yet again, but he’s become quite good at purging). I recommend he put the editors and writers on a performance improvement plan that includes increasing the number of comments/feedbacks per bloglet they write about. That’ll fix their little red wagons. BTW, you’d be allowed to stick around. Maybe :P

    As for ads? Think Global, Act Local. Its the tagline for Location Based Services but then again, LBS is a good place to watch for changes. Anyway, ’nuff from me, I have my Bloggers Anonymous meeting to attend. Heh.

  • A second line of fire rose in her cheeks as again Suzanne screamed.